Assets bought / sold after DOD

[Kea]

Final 1099B shows sales after date of death. These receive step up basis to beneficiaries - so do I show "Inherited" as acquired date on the decedent's 1040? She didn't inherit them, but it would give them the long term treatment to pass to the benes. Or, it doesn't matter since it becomes $0 (for that specific asset) when it gets the nominees (code N) adjustment?

The ones purchased after DOD would keep the stated purchase date would be reported with the actual purchase date (even though after DOD)? Again it becomes $0 after applying nominee code.

[jainen]

>>Final 1099B shows sales after date of death.<<

Who grabbed the cash without telling the brokerage that the assets belonged to someone else? The 1099 needs to be reissued with the correct tax ID number. I can't imagine a brokerage not responding to a reasonable request, since they are under so much IRS scrutiny this year (not to mention the SEC).

[Kea]

I mentioned it but did not request a correction. This was for 3 transactions out of 81. 2 were return of capital and one was a $26 loss. So minimal (if any) change to the tax.

I will follow up with broker on Monday.

[OldJack]

Maybe I don't understand.... But it appears to me that the broker "account" belongs to the "estate" of the deceased until it is transferred/changed to a beneficiary. Therefore all these transactions would be accountable on a 1041 making the 1099B correct? I don't see a nominee here.

[Kea]

I thought I read in my NATP workbook that if the account was set up "transfer on death" all transactions after death went to the beneficiaries' returns and no 1041 needed for those. I don't do many of these so I do appreciate y'all keeping me honest.

Also the "sales" after death were (monthly) returns of capital from REMICs. So (as it turned out) almost every transaction on the 1099B had a $0 gain / loss -- even before worrying about the nominee designations.

When I posted originally, I didn't have basis info. I didn't yet know that the REMIC "sales" were just ROC.

[OldJack]

>>"transfer on death"<<

I don't think you mentioned that fact in your other posts. If that is the case, then the broker should have issued a 1099B to the estate for prior to DOD and to the beneficiary for later transactions.

[Kea]

My apologizes for not mentioning it earlier. (I thought I did, but doesn't count for much these days!)

His mom passed away in early November & last transactions in her SSN are a couple of weeks later. Picks up on son's 1099s by late November or early December. All things considered, it got moved pretty quickly.

I have yet to see a 1099 actually stop on DOD. Most have several months of interest or dividends after DOD before the account gets changed over. This is the first one I've seen with stock purchases or even sales.